HKSAR v. LO ANDY

DCCC 223/2019

[2020] HKDC 209

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 223 OF 2019

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REASONS FOR VERDICT

1.  The defendant faces 2 charges of "Theft" (Charges 1 and 2) and a charge of "Fraud" (Charge 3). He pleaded not guilty to all 3 charges.

2.  The prosecution offered no evidence against the defendant in respect of Charge 2; and upon which, the charge was dismissed accordingly.

3.  At the close of the prosecution case, defence counsel Mr. Davies submitted no case to answer in respect of Charge 1.  Having heard submissions from both sides, I ruled no case to answer and dismissed the charge with reasons given, a copy of which is attached as Annex I.

4.  I now give reasons for my verdict in respect of Charge 3.

The Prosecution Case

5.  According to Mr. Kwok Yu Chun (PW2), during the material period, his company Rich Empire International Limited ("Rich Empire") owned a Hong Kong/mainland cross border motor vehicle licence "粵ZQ097港" ("the Car Plate").

6.  In November 2011, the then shareholders of Rich Empire[2] (namely Terence Ho, PW2 and Harvest Standard Limited) signed an agreement with Winko Foundation Limited[3] ("Winko") in respect of the sale and purchase of the shares in Rich Empire including the Car Plate (see Exhibit P4).

7.  PW2 explained that prior to the signing of Exhibit P4, Harvest Standard Limited ("Harvest Standard") was already renting the Car Plate from Rich Empire, which was the reason why Harvest Standard was a party to Exhibit P4. PW2 said the car using the Car Plate was owned by Harvest Standard; and thus Harvest Standard held 1 share in Rich Empire.  PW2 also said that the defendant claimed to be the boss of Harvest Standard.

8.  According to PW2, the defendant represented Winko in the transaction.  He paid RMB150,000 into PW2's personal account in the mainland as deposit.  Upon receiving the deposit, PW2 caused 2 persons nominated by the defendant (namely Tsim Hing Lee and Fu Chiu Wa) to be appointed respectively as company secretary and director of Rich Empire[4], so that they could become named drivers of the car bearing the Car Plate.  PW2 stated that the sale and purchase transaction did not go through, and he did not receive the purchase price in full.  He therefore removed the 2 named drivers hoping the defendant would contact him.

9.  Mr. Siu Wing Nin (PW3) and the defendant signed an agreement on 8 January 2016 in respect of renting out the Car Plate to PW3 (see Exhibit P5).  On the same day, PW3 paid the defendant RMB19,000 as earnest money.  On 11 January 2016, the defendant acknowledged receipt of HK$150,000 from PW3 as deposit and referral fee (see Exhibit P6).

10.  A few days later, PW3 took out an insurance policy for his car and transferred ownership of his car to Rich Empire.  Despite repeated demands, PW3 was unable to use the Car Plate.

11.  In March 2016, PW3 conducted a company search in respect of Rich Empire and discovered that it was not owned by the defendant.  In April 2016, the defendant sent PW3 a driver approval notice (Exhibit P7) saying that the paper work was in progress.  PW3 accused the defendant of having falsely represented to him that the defendant was the owner of the Car Plate and deceived his money.

The Defence Case

12. The defendant elected not to give evidence or call any witness. This is his right; I drew no adverse inference against him in this regard.

Assessment and Analysis of Evidence

13. The burden of proof is on the prosecution to prove each element of the offence beyond reasonable doubt.

14. As revealed in the cross-examination of PW2, the Car Plate was already leased to the defendant or his elder sister between 2009 and 2011. Winko then signed an agreement to purchase the Car Plate by buying the shares in Rich Empire. PW2 agreed that there was a dispute with Winko in 2013 and Winko did not pay the purchase price in full. Notwithstanding the dispute, the directors of Winko were allowed to drive the car bearing the Car Plate between 2011 and 2013.

15. In 2013, Winko sued all other parties to Exhibit P4 as well as the defendant. The lawsuit was dragged on for a few years. Between 2013 and 2016, no one could use the Car Plate due to the lawsuit. PW2 explained that the Car Plate was linked to the car and the car went to Hong Kong. Winko later sold the car, so he could not go through the formalities of transferring the Car Plate to another car.

16. PW2 admitted that he sold Rich Empire to someone else at a later time and is not sure if the new owner was able to complete the formalities of transferring the Car Plate. It was put to PW2 that in 2016, the defendant found a Mr. Pang who was able to deal with the formalities. As a result, PW2, the defendant, Mr. Pang and PW3 had an agreement to go to the mainland together to sign some documents. PW2, however, did not show up. PW2 denied this allegation but claimed that as far as he knew, the meeting was in Shenzhen, not Guangzhou.

17. During the cross-examination of PW3, he agreed that the defendant had repaid him HK$43,800. PW3 also agreed that there was a meeting in the mainland arranged by the defendant, but the person who had the documents did not show up. As a result, the formalities could not be completed. PW3 accepted that a referral fee of RMB30,000 was involved. He revealed that a former colleague named Vincent introduced the defendant and someone named Ah Chung to him. He agreed that the money he paid to the defendant could have gone to Vincent or Ah Chung. PW3 further disclosed that Vincent admitted to him having taken 5,000 dollars.

18. PW3 agreed that he could always contact the defendant in 2016 and that the defendant did not try to hide away. The defendant paid him back by way of a cheque drawn from the defendant's bank account. When requested by PW3 to sign an IOU, the defendant complied. PW3 accepted that when he handed over the RMB19,000 earnest money, he saw Ah Chung counting the banknotes. Most importantly, PW3 agreed that the defendant was trying to refund the money to him at all times.

19. In my view, there is a genuine possibility that Winko could have become the owner of the Car Plate (by owning the shares in Rich Empire) way before 2016 if the sale and purchase transaction in Exhibit P4 had been successful. There is no evidence in respect of the shareholding of Winko. But according to PW2, the defendant was representing or could have been representing Winko. In other words, if the deal had gone through, the defendant could have been regarded as the owner of the Car Plate, at least in layman's terms. Furthermore, the ownership of the Car Plate between 2013 and 2016 was unclear anyway due to the lawsuit. On this basis, there is a genuine possibility that what the defendant had told PW3 about the ownership of the Car Plate, if he did say so, was not false.

20. There is no evidence before me (and I would not speculate) as to what went wrong with the purchase of the Car Plate by Winko. I do not know why PW2 did not show up at the meeting in the mainland to complete the formalities of transferring the Car Plate.

21. Based on the evidence before me, the defendant has done all he could to make things work so that PW3 could use the Car Plate, including finding a Mr. Pang who could help with the formalities[5]. The defendant has also repaid PW3 partially.

22. In my view, there is clearly a doubt as to the falsity of the defendant's representation regarding the ownership of the Car Plate, if he did make any to PW3. There is also a doubt as to the defendant's intention to deceive PW3. In other words, the prosecution has failed to prove the charge against the defendant beyond reasonable doubt. Accordingly, I find him not guilty of Charge 3.

Annex I

Defence counsel Mr. Davies submitted no case to answer in respect of Charge 1.

2. The evidence in relation to Charge 1 came primarily from Mr. Cheng (PW1). There is no dispute that back in July 2014, PW1 paid the defendant a total sum of RMB700,000 to purchase a Hong Kong/mainland cross border motor vehicle licence ("the Plate"). There is also no dispute that the defendant did not deliver the Plate to PW1.

3. During cross-examination, PW1, with some degree of reluctance, admitted that he was purchasing the Plate on behalf of a Mr. Elton Tsang (though he strenuously denied that he knew a Mr. Tsang Ka Wai or was working for him). PW1 also admitted that the sum of RMB700,000 in fact came from Mr. Elton Tsang; and thus the defendant owes PW1 nothing.

4. By virtue of section 6(1) of the Theft Ordinance (Cap.210), the sum of RMB700,000 is deemed to be the property of PW1 for the purpose of Charge 1. As such, the charge is not defective.

5. On the other hand, during cross-examination, it was put to PW1 that at some point, he went with the defendant to a finance company arranged by Mr. Tsang to borrow money. From there, the defendant borrowed over HK$800,000, and a cheque in the sum of HK$828,000 was made out to Mr. Tsang. In other words, the defendant had refunded the money to Mr. Tsang. PW1 claimed that he is not sure if he had gone with them to the finance company because it has been a few years already. PW1 further claimed that he played no part in and does not know anything about the financial dealings between the defendant and Mr. Tsang. In particular, he does not know if the defendant had in fact repaid Mr. Tsang.

6. PW1's evidence clearly leaves a genuine possibility that defendant might have repaid Mr. Tsang; and there is no evidence from the prosecution to rebut this possibility beyond reasonable doubt. Hence, based on PW1's evidence, even if taken to its highest, no properly directed jury could convict the defendant of Charge 1. On this basis, I rule that there is no case to answer. Charge 1 is dismissed.